"What will be scary is if we get through the 6th and just keep vertically rising..... "
Scary indeed. Looking for a top around April 6 has several compelling arguments (i.e., TA indicators, beginning of a traditionally weaker U.S. quarter, beginning of a new FY in Japan - traditionally weak as well, etc.) Also, a backup in interest rates (30 - 56.41 and 10 - 52.59) may be telegraphing further backups as we approach Aug 98 levels.
However, a further parabolic rise (continuing through the spring) would confirm that this market is simply a function of the multiplier effect of an unprecedented increase in the money supply and the over reaction of the 3 quick rate cuts last fall. And it has only been less than 6 months since these rate cuts, so a continued rise in the equity markets is not out of the question (all things remaining equal). But, EVENTUALLY, "the law" of variable proportions (or diminishing returns) will take effect as that last marginal dollar is squeezed out of investors and any additional amount of money poured into the system from the FED will have little positive influence. This would be the "Nightmare" scenario as the resulting damage from a total market collapse would require "years" (at the least) to repair…sounds familiar doesn't it, i.e., South Seas, Tulip Mania, post 1929.
I believe, that a top around the first week of April (at the current levels) followed by a healthy correction of 35% +/- 10, may save us from an equity "nuclear winter".
We may see further gains this week as we approach quarter's end as today's action appeared "window dressing" related...Note the behavior of MU (which I have a current position - puts)like stocks relative to the broad market. Also with the press from the DOW 10K close may result in a "Powerball Lotto" behavior as marginal investors and traders catch the fever. This could be indicative of the top we are anticipating. At any rate, the next two weeks will be extremely interesting.
Warmest Regards,
Matt P.
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